The chairman of software giant Microsoft’s European business believes that Northern Ireland could become a centre of excellence for cloud computing if the public and private sectors embrace it early enough.

Jan Muehlfeit was speaking as Microsoft marked 10 years in Northern Ireland by hosting a gathering of customers and partners from the public, private and NGO sectors at the Culloden Hotel.
The company, which has its Belfast base in the Northern Ireland Science Park, started up in the province a decade ago with one person in a serviced office, but now has a local partner network of 436 organisations that employ more than 6,000 people.
While the company has been in the Republic for 25 years and the majority of its 1,200 employees on the island are based at its European headquarters in Sandyford, Mr Muehlfeit paid tribute to the burgeoning ICT sector in Northern Ireland and the success of Microsoft’s local operations.
“Ireland as a whole, whether that’s North or South, is a very important market for us. We started 25 years ago with 150 people, now there are 1200 people in Dublin and Belfast. It goes beyond Ireland because we have the European operations centre that is making products and services for other markets. So for us it is a very important market and it is an important enabler of our global business,” he said.
And he added: “One tool that can deliver for Northern Irish organisations of all sizes is the Cloud. The Cloud offers significant potential to the economy as a whole if public and private sector embrace it early. Northern Ireland could become a centre of excellence for cloud computing, a location for inward investment and could use this as a platform to drive a competitive strategy.”
The Seattle-based technology corporation will launch its next wave of cloud-based products in the first quarter of 2011 and Mr Muehlfeit acknowledged that the evolution of cloud computing had already changed the way Microsoft went about developing and selling its products.
“It is a natural shift. People will be able to use what they had, whether that’s development tools or servers on premises in the cloud. But we have now 70% of our developers working on cloud applications. We are also investing very heavily in the data centres. The one in Dublin is, outside the US, the most modern and biggest centre worldwide,” the Microsoft Europe chairman said.
“In ICT systems 80% of the budget is spent on maintenance, leaving very little to invest for the future. That will change. Cloud computing can be a great enabler for us all to be more productive and save money.”
Microsoft’s Managing Director of Irish operations Paul Rellis said that despite the economic difficulties across the island, the company expected its business in Northern Ireland and the Republic to grow over the next year. He also highlighted the shift towards cloud computing – where customers will essentially pay for what they use - as the key driver for the IT sector.
“Cloud computing is the thing, more than anything, that is going to make a difference to Northern Ireland and the Republic of Ireland, more than anything in IT. Because what it means is that the IT industry is going through a transition like it went through when we went from mainframes to PCs or when the internet came along. It is that kind of once in a 20 year change,” he said.
“It is not just business it is in everyday life. It is very simple, it works. The new Kinect Xbox console, which is based on motion sensor gaming, that is going to open up beyond gaming a huge opportunity for healthcare, education, business. We’re only at the start of this. Is it going to change Microsoft significantly? Yes it is.”
Nigel Mullholland, Managing director of Microsoft partner NITEC, which is focused on taking enterprise computing to the SME market, said the cloud will also radically change the 3-5 years cycle after which products have traditionally been refreshed, and will mean some adjustments for partner organisations.
“A lot of our energy is focused on maintaining products, so one of the big challenges is how quickly can I turn and re-skill my workforce. The Microsoft partners have a big challenge ahead of them,” he said.
“Cloud is going to change everything about how we do business, it is really going to affect our financial model. But it means that we can now take the crown jewel products and present them to the little guys. Where we’ve been able to give a robust email and secure platform to every customer, there are things like CRM products or Microsoft’s SharePoint suite which I can now take to the smaller companies,” he added.